SAMPLE ASSESSMENT TASKS ACCOUNTING AND FINANCE GENERAL YEAR 11

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1 SAMPLE ASSESSMENT TASKS ACCOUNTING AND FINANCE GENERAL YEAR 11

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3 1 Sample assessment task Accounting and Finance General Year 11 Task 1 Unit 1 Assessment type: Project Conditions Period allowed for completion of the task: 2 weeks Task weighting 5% of the school mark for this pair of units Your great-aunt Henrietta, has left you and your two brothers $300,000. As your aunt had no children of her own, she left instructions in her will that you were to receive $100,000 each. Research the different investment opportunities available to you and decide where you think it would be best to invest your $100,000. Then again, you and your brothers may decide to pool your money and invest the $300,000 together. It s your choice! Resarch and compare three (3) investment options available: shares property cash deposits. 1. For each of these investment options (i.e. share, property and cash deposits): explain three (3) features (9 marks) describe the process for investing (6 marks) identify the expenses involved. (3 marks) 2. Explain the concepts of risk and return and apply these concepts to each of these investment options. (8 marks) 3. a) For each of these investment options, identify two (2) advantages and two (2) disadvantages (12 marks) b) Which of these investment options would you choose? Provide three (3) reasons to justify your choice. (6 marks) 4. Explain one (1) factor which would influence your decision to invest individually or with your siblings. (2 marks) 5. Provide two (2) alternative investment options for the $300,000 (i.e. other than investing in shares, property, or cash deposits). (4 marks) 6. Outline two (2) financial institutions other than banks that cater for the financial needs of individuals. (2 marks) 7. Explain what a financial scam is, and two (2) measures you can take to avoid being caught up in financial scams. (6 marks) 8. Select a government agency (such as Department of Commerce) and outline its role in relation to personal finance. (2 marks) Total = 60 marks

4 2 Marking key for sample assessment task 1 Unit 1 1. For each of these investment options (i.e. share, property and cash deposits): explain three (3) features describe the process for investing identify the expenses involved. Explains the features of each investment option (shares, property and cash deposits) 1 9 Note: Maximum of 3 marks for each investment option (1 per feature) Features of shares certificates bought and sold on the stock exchange through brokers have a face or nominal value provide a stake in the profits of the company during its life and in the assets of the company when it is wound up usually provide dividends (share of profits) two times per year share value may increase or decrease in value over time Features of property large amounts of money are involved provide ongoing returns if rental properties generally increase in value over time Features of cash deposits small amounts may be invested provide ongoing returns in the form of interest easy access to funds no waiting periods retain face value, but may lose nominal value Note: a duplicate feature for a particular investment option does not receive a second mark. Describes the process for investing in each option 2 Note: Maximum of marks each for the process States a fact about the process for investing in each 1 Total 6 Process for investing in shares usually through an external party, a stockbroker, or may be made individually Process for investing in property usually through an estate agent Process for investing in cash deposits by depositing funds with the financial institution Note: a duplicate process for a particular investment option does not receive a second mark.

5 3 1 3 Identifies the major expenses relating to each investment option (1 per expense) Expenses relating to shares brokerage charge is added to the cost of the shares Expenses relating to property stamp duty is added to the price of the property when purchasing Expenses relating to cash deposits generally there are no expenses relating to making cash deposits Note: a duplicate process for a particular investment option does not receive a second mark. 2. Explain the concepts of risk and return and apply these concepts to each of these investment options. Explains the concept of risk 1 Explains the concept of return 1 Explains risk and return for each investment option 1 6 Note: Maximum of 2 marks for each investment option (1 mark each) Total 8 Risk the chance an investment won't give you the outcomes you want compared to the outlay made the chance that the amount earned (the return) on the investment is higher or lower than expected Return the gain or loss generated on an investment relative to the amount of money invested and usually expressed as a percentage how much is earned on the investment itself (capital invested) and the ongoing profits the investment generates generally, the larger the potential investment return, the higher the investment risk and vice versa Application of the concepts to shares share prices are determined by the forces of supply and demand and the company s future earnings prospects. Earnings will determine the value of a share and any changes in forecast earnings, either by company management or by market analysts, will impact on the share price and the return on the share. Shares attract a potential high degree of risk and high rate of return. Application of the concepts to property property investments have a higher risk than fixed interest but less than equities (shares).they can provide tax-advantaged income from rent received and can include capital growth. The risk is moderate to high, as is the return. Application of the concepts to cash deposits cash deposits are considered to be lowest level of risk and have the lowest rate of return. The investment provides interest only, (usually a moderate interest) and the investment value may not keep up with inflation. Note: a duplicate explanation of risk or return for a particular investment option does not receive a second mark.

6 4 3. a) For each of these investment options, identify two (2) advantages and two (2) disadvantages. b) Which of these investment options would you choose? Provide three (3) reasons to justify your choice. Identifies two advantages of each of the three investment options Identifies two disadvantages of each of the three investment options 1 6 (1 per advantage) 1 6 (1 per disadvantage) Total 12 Answer could include, but is not limited to any two of the following for each investment option: Advantages of shares ongoing profits - trends show that generally shares return annual profits (dividends) shareholders aren t responsible for the company s actions, and can t be held liable legally for those actions the shares themselves can be sold on to others which is a very simple process brokerage fee applies Advantages of property property has a physical, tangible quality property is durable contributed by partners Advantages of cash deposits can be set up without a third party ability to raise capital through shares Disadvantages of shares value is on paper, the share certificate itself doesn t have value the company directors may decide not to declare dividends (profits) so there is no ongoing return shareholders aren t able to make decisions on behalf of the company Disadvantages of property buying property incurs large expenses such as stamp duty property may be in an area that is rezoned and loses value dependant on selling the property to receive funds property may be difficult to sell and investment can t be cashed at premium prices may require repairs and maintenance, otherwise tends to deteriorate and eventually may even fall down Disadvantages of cash deposits generally low interest rates apply investment may retain face value but lose real value if the interest rate doesn't keep up with inflation the institution in which the deposits are made could experience financial difficulty, and funds could be lost Note: a duplicate advantage or disadvantage for a particular investment option does not receive a second mark. Provides three valid reasons for the chosen investment option 1 6 (2 per reason) Answer could include, but is not limited to reasons from the following: Shares shares yield dividends on a regular basis as a shareholder, your investment is protected because you aren t responsible for the actions of the company directors shareholders not bound by the financial actions/decisions of other shareholders because shares themselves don t have a physical quality, they won t deteriorate

7 5 Property the value of property usually increases as time goes on repairs to property, if used for rental, are tax deductable items property is able to be rented out so it provides ongoing funds property can be negatively geared Cash deposits many cash deposits have withdrawal options investment isn t tied up for a long length of time the cash doesn t need to be sold to others (like shares or property) easy form of investment to enter into Note: a duplicate reason for a different investment option does not receive a second mark. 4. Explain one (1) factor which would influence your decision to invest individually or with your siblings. Explains a valid reason for the decision to invest individually or with siblings 2 States a valid reason for the decision to invest individually or with siblings 1 Answer could include, but is not limited to reasons from the following: Individually make individual decision about the investment type as it isn t necessary to consult with the others future decisions about the investment, such as duration, cashing in, can be made individually Siblings pooling resources allows for investing in larger types of investment which will provide greater returns diversification in investment possible where a variety of investments can be undertaken, increasing the odds of selecting a profitable range of investments support from siblings to gain ideas and support for future investment strategies 5. Provide two (2) alternative investment options for the $300,000 (i.e. other than investing in shares, property, or cash deposits). Option 1 Explains the alternative investment option for the $300,000 2 States a fact about the alternative investment option for the $300,000 1 Option 2 Explains the alternative investment option for the $300,000 2 States a fact about the alternative investment option for the $300,000 1 Total 4 Alternative investment options superannuation: money saved for retirement, voluntary extra contributions can be made bonds: loans of money to corporate or government entities for a defined period of time at a fixed interest rate debentures: long term loans to companies yielding a fixed rate of interest private markets: investing in privately owned business

8 6 6. Outline two (2) financial institutions other than banks that cater for the financial needs of individuals. Outlines two financial institutions other than banks 1 2 (1 mark each) credit unions: a member-owned financial cooperative that provides a range of financial services such as loans for personal financial use retail stores: provide a variety of products for cash or credit that may be purchased physically or online telecommunication companies: offer telecommunication products and services that may be purchased physically or online 7. Explain what a financial scam is, and two (2) measures you can take to avoid being caught up in financial scams. Explains the concept of a financial scam 2 States a fact about a financial scam 1 Measure 1 Explains an appropriate measure to avoid being caught up in financial scams 2 States an appropriate fact about the measure 1 Measure 2 Explains an appropriate measure to avoid being caught up in financial scams 2 States an appropriate fact about the measure 1 Total 6 Financial scam illegally and/or improperly accessing and using a person s money or other property illegal and/or unethical decisions and actions made by people who handle money and other forms of assets on behalf others Measures to avoid being caught up in financial scams do not provide bank account details or account pin numbers in unsecure environments, for example on the phone or online research what s being suggested, for example check with an authorised agency to see whether what is being offered is legitimate if you re unsure don t give in to peer group pressure to engage in the financial situation seek professional advice by consulting a financial adviser before engaging in the financial activity 8. Select a government agency (such as Department of Commerce) and outline its role in relation to personal finance. Correctly outlines the role of an appropriate government agency in relation to personal finance Provides limited and/or incorrect information about the role of a government agency in relation to personal finance Answer Will depend on the agency selected 2 1

9 7 Sample assessment task Accounting and Finance General Year 11 Task 12 Unit 2 Assessment type: Test Conditions Time for the task: 50 minutes under invigilated conditions Calculators may be used Task weighting 10% of the school mark for this pair of units Justin Walters operates a small technology business as Justin Walters Teltech. He keeps a record of his bank balance by adding each deposit that goes into the business bank account and subtracting every withdrawal that comes out of it. This way, he s always sure of exactly how much money there is in the account. On 31 December, he received a bank statement detailing all banking transactions for the period 30 November to 29 December. He noted that the bank statement and his own tally of cash didn t agree. Justin s bank statement, at 31 December, shows a balance of $24, The cash records on the same date show a balance of $23, On checking his bank statement, Justin discovers the following items: Cheques not yet presented to the bank: No. 061 (27 Dec) $ No. 062 (27 Dec) $49.21 No. 063 (29 Dec) $ No. 065 (30 Dec) $ A deposit of $820 was incorrectly entered as $280 in the cash records. A deposit of $150 made on 30 Dec and a deposit of $250 made on 31 Dec do not appear on the bank statement. A cheque of $850 the business had received by a customer was returned by the bank with the bank statement. The bank charged an account keeping fee of $60. Interest income of $1, was recorded by the bank. 1. Using the information provided above: (a) prepare a bank reconciliation statement (9 marks) (b) adjust Justin s record of cash received and paid. (6 marks) 2. Provide two (2) reasons explaining the advantages of reconciling the bank statement and the cash records. (2 marks) 3. Although Justin keeps records of his cash transactions, he does not prepare a budget for his business. Outline the meaning of a budget. Explain two (2) benefits of preparing one. (5 marks) 4. Outline three (3) measures (other than preparing bank reconciliations and budgets) to control cash. (3 marks) Total = 25 marks

10 8 Marking key for sample assessment task 12 Unit 2 1. Using the information provided above: (a) prepare a bank reconciliation statement Correct figures provided in the bank reconciliation Answer Justin Walters Teltech Bank Reconciliation Statement 31 December 2016 Credit balance as per bank statement $24, Add deposit not yet credited $24, (1 mark each) 1 mark 1 mark 1 mark 1 mark Less cheques not deposited No. 061 $ mark No mark No mark No mark Debit balance as per bank account 24, mark (b) adjust Justin s record of cash received and paid. Correct figures provided in the cash record Answer Justin s cash records 1 6 (1 mark each) Balance as per cash records Dec 31 $23, mark Add: Interest income $1, mark Deposit understated mark 1, $25, Less: Cheque returned mark Bank account keeping fee mark Balance as per bank statement $24, mark

11 9 2. Provide two (2) advantages of reconciling the bank statement and the cash records. Provides appropriate advantages for reconciling the bank statement and the cash records 1 2 (1 per advantage) the bank account balance and the cash records will agree items omitted from either the bank statement or the cash record can be identified and recorded any errors that have been made in recording transactions can be corrected errors made in transposing amounts can be corrected, for example recording $230 instead of $ Although Justin keeps records of his cash transactions, he does not prepare a budget for his business. Outline the meaning of a budget. Explain two (2) benefits of preparing one. Outlines the meaning of a budget 1 Subtotal 1 Benefit 1 Correctly explains a benefit of preparing a budget 2 States a benefit of preparing a budget 1 Benefit 2 Correctly explains a benefit of preparing a budget 2 States a benefit of preparing a budget 1 Total 5 Budget a statement that lists predicted cash in and predicted cash out for a period of time shows whether the predicted amount of cash received is enough to cover the predicted amount of cash to be paid Benefits of preparing a budget identifies how much money is coming in, is going out, and how much is left allows for planning how much to put aside for up-coming payments or planned future expenditure identifies what the money is being spent on and helps to identify areas of expenditure that may need to be reduced identifies areas generating cash received and helps to identify those areas that generate the most or the least cash 4. Outline three (3) measures (other than preparing bank reconciliations and budgets) to control cash. Outlines an appropriate measure for controlling cash don t keep cash on the premises, if possible if cash needs to be kept on the premises, use a cash register or keep in a secure place document all cash received and paid, for example in a cash book or journal record petty cash items in a separate petty cash book separate the duties of receiving cash and paying cash, if possible 1 3 (1 per measure)